It’s Y2K, do you
know where your computer costs are? As
information technology (IT) budgets grow, it is important to recognize the
various activities supported by these substantial resources and allocate
them accordingly, rather than treating the entire IT department as a whole.
P&D scheduling, linehaul optimization, dock planning, and document
scanning should be allocated to the P&D, Linehaul, Dock and Billing &
Collecting activities which they directly support, rather than being buried in
overhead.
This would be done best through separate expense
sub-accounts in your own accounting systems, mapped to the CIS expense
categories appropriate for each activity, including the General and
Administrative category for some, but not all, of the information systems costs.
If the expense sub-account method is not available, a survey of
computer systems can be made to obtain a percentage breakdown of expenses.
Then, the expense account(s) for the IT department can be prorated into
the various cost activities automatically using the expense distribution ratio
in the CIS general ledger account mapping file GLMAP.CIS. In that account conversion file, which consists of columns of
your expense accounts and the corresponding CIS unit cost expense categories, a
third column can be added, if it does not already exist, for ratios to
prorate expenses.
For example, if our survey indicates that 20 percent of IT cost (our expense account 4699) supports Linehaul dispatch, and should be assigned directly to linehaul direct-other (TCG code 10), 25 percent P&D (TCG code 40), 30 percent Billing & Collecting (TCG code 71) and the remaining 25 percent Head Office (TCG code 86), then the GLMAP.CIS file should show:
4699 10 0.20
4699 40 0.25
4699 71 0.30
4699 86 0.25
Each time unit costs are developed, the general
ledger processing will allocate the IT expenses accordingly.
Revised February 2005